Pace of Change Too Slow to Keep Entrepreneurs in France

Caroline Sivilia left Paris for London to start a magazine.Credit
Jonathan Player for The New York Times

LONDON — Four years ago, Caroline Sivilia, a Parisian who worked for the ad agency Publicis Groupe, left France to start a magazine for French people living in London.

“I was young, I wanted to create, I came with nothing, no English,” said Ms. Sivilia, 34.

Now, she employs eight people and a team of freelancers and her magazine, London Macadam, is available at 300 distribution points in London and 50 in Paris. She is among the legions of entrepreneurial refugees who have survived and thrived in England even as France’s president, Nicolas Sarkozy, has been pushing forward a pro-capitalist agenda.

Ms. Sivilia says she would consider returning to France but probably not as a business owner.

“I’d do like the English,” she says with a laugh. “I’d buy a house in the south of France. But while I’m in my entrepreneurial phase, I want to be here.”

Such views add to the uphill battle that Mr. Sarkozy faces as he struggles to transform the economic soul of France. Sarkonomics, as the news media have called Mr. Sarkozy’s brand of economic changes, has yet to meet expectations.

Mr. Sarkozy’s poll numbers are falling. A series of transportation strikes last year greeted his proposals to change the government pension system. Thus far this year, taxi drivers and air traffic controllers have also held strikes.

Mr. Sarkozy’s outspoken nature and colorful personal life have also made him vulnerable to criticism. But he has pressed ahead with his views of how France’s generous cradle-to-grave entitlements should change.

In December, Mr. Sarkozy said he was considering 100 measures that included ways to streamline France’s bureaucracy and provide more consumer-friendly services to business and the public. The proposals included cutting the cost of red tape on business by 25 percent.

Many French entrepreneurs are continuing to push for still more changes. Olivier Cadic, 44, started a computer manufacturer in France in 1982 called Info Elec and moved it to Kent in 1997. He later sold that company and started another, Cinebook, which translates comic books like Lucky Luke and Asterix and sells them in markets like the United States and Australia. In 2007, Mr. Cadic ran for and won one of 12 seats in the French Senate reserved for representatives of French expatriate voters, and he does not mask his enthusiasm for Mr. Sarkozy and his policies.

Economists, however, say France will have to make much deeper changes to its culture’s attitude toward capitalism if it intends to keep young entrepreneurs at home.

Access to start-up financing remains difficult and markets in many industries are often monopolized by large conglomerates, said Elie Cohen, a leading French economist.

Moreover, legislation limiting the workweek to 35 hours hurts small businesses more than large. Contrasting France with Germany and Italy and their networks of robust — often family-run — multinational companies, he said, “We don’t have a fabric of small and midsize enterprises; it’s an essential weakness.”

“The rules are made for the big enterprises, not for the small,” Mr. Cohen added.

There are now an estimated half a million French men and women living and working in England, most of them under 35. The waves of refugee entrepreneurs fleeing to England shows no signs of abating.

Today, amid the sheep meadows and the hop gardens in Kent County, more than 5,200 people, a mix of French and English, work at more than 75 French companies.

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Change may come, but France is not a country of evolution, but of revolution, said Jean-Claude Cothias, who left France 10 years ago to found a consulting company in Ashford, England.Credit
Jonathan Player for The New York Times

“Change may come, but France is not a country of evolution, but of revolution,” said Jean-Claude Cothias, who left France a decade ago to found Eikos, a consulting company. “Something has to go, to collapse, then you fix it,” Mr. Cothias, 34, said. “England fixes things all the time.”

As France struggles to redefine its approach to capitalism, the British are benefiting from policies that they themselves officially oppose: the free movement of capital and workers across European borders.

Throughout much of Britain, resistance to some aspects of the European Union remains strong. For instance, the country continues to reject adoption of the euro or the Schengen Accord, which eliminated border controls among most European Union countries, including France, Spain and Germany.

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But in these parts, politicians and business leaders alike speak about the benefits of trade.

Ashford, in Kent, is the first stop in England on the Channel Tunnel train, less than an hour from Lille and London and less than two hours from Paris.

“From down here you can look out and see Northern France,” said Alan Marsh, responsible for international relations in the Kent County Council. “It’s very comforting.”

Among the first young entrepreneurs to reach Kent, Mr. Cothias founded Eikos in 1998 after the French company that had employed him refused to let him establish a subsidiary in Britain. To register his company in Britain cost him £1, or about $2. In France, his parents would have had to mortgage the family home to pay the applicable fees, he said.

He also learned that while an employer in France must pay pension, unemployment and social security charges that add up to 48 percent of an employee’s salary, British employers pay only about 10 percent.

He says he believes that such differences reveal a deeper philosophical divide. “The economy is viewed here as something needed, one of the most important parts of society, if you want everyone to be clothed and fed,” Mr. Cothias said. “This creates a totally different environment for business.”

The complaints of businessmen like Mr. Cothias have not gone unheeded in the halls of government in Paris. Three years ago, he was invited with several other émigré business owners to meet a government minister. One change that resulted from their criticism was a reduction in the fee for registering a new company in France to one euro, about $1.53.

Even the British know they will not hold onto all the French that come, and they say that is good for both Britain and France. “They get qualifications that they can then repatriate in the French language,” said Paul Wookey, the chief executive of Locate in Kent, a marketing organization that encourages foreign investment in the county. “That’s what pushes the French economy along.”

Some business experts caution French businesses that Britain does not always guarantee success in offering the benefits that businesses seek. Patricia Goodenough, whose agency, Advent UK, helps young French entrepreneurs migrate, said that only about one in four of the French citizens she sent to Britain had actually made it in business. “Some didn’t do well,” she said. “The dreamers, not the doers.”

In Paris, at the headquarters of the Center for Young Business Leaders, an organization that encourages entrepreneurship, Thomas Chaudron, the president, said that business success in any country was arduous.

He said that since the late 1990s, when much of the migration to England occurred, the number of start-ups in France had consistently risen. In 2007, the number rose almost 6 percent over 2006, to 339,957. Since 1997, the figure has increased about 26 percent.

Mr. Chaudron, 34, started a business near Chartres, France, in 1997 making office partitions. It now has 35 employees and $10 million of revenue. In any country, entrepreneurship faces challenges, regardless of the government’s support, he said.

“It’s not like buying a baguette,” he said. “It’s an adventure.”

A version of this article appears in print on , on Page C1 of the New York edition with the headline: Pace of Change Too Slow to Keep Entrepreneurs in France. Order Reprints|Today's Paper|Subscribe